Are More Appraisals Being Challenged By Insurers—Why Go to Appraisal If Insurers Will Not Pay the Appraisal Award?

A lawsuit filed by Church Mutual seems to be part of a trend of insurers analyzing high-value appraisal awards and not paying them. I recently mentioned the nationwide non-payment of appraisal awards by State Farm in
Why Has State Farm Stopped Paying Appraisal Awards? The instant lawsuit¹ argues that the award inherently is subject to coverage determinations of unowned amounts because the appraisal panel said they never applied any of the policy conditions:

The Appraisal Award states that the award is ‘made without any consideration of any deductible amount, prior payments issued to the insured or any other terms, conditions, provisions or exclusions of the above policy.’

For those who teach appraisers how to appraise losses, whether policy terms should be considered and whether to include language which affirms the panel never consider any of the policy terms, this case is an important study and should be addressed. For example, should the appraisal panel appraise damage to property not covered under the policy? How does the insurer know that the panel did not include those as part of the award, especially if the panel does not consider any of the policy terms? By not looking at the insurance policy, how do the parties know that the panel correctly addressed the actual cash value measure?

I suggest that policy language is important, even to an appraisal panel. The alleged damaged property should be covered if the insurer is to pay for it. The valuation provisions of policies should be read because those determine how the property is to be valued. There may be special conditions regarding matching, loss to pairs or sets, and other provisions that one has to know before determining “the amount of loss.”

I have been a critic of Church Mutual, as noted in The Devil Is in the Details When Making a Claim with Church Mutual Insurance Company. So, it is just the beginning of this challenge to a large appraisal award, and how much of the insurer’s allegations are true remain to be determined. We will follow the development of this case as well as comments from those in the business of teaching appraisal processes.

Thought For Day

I see all these old people who don’t have anything to do but eat, drink and sleep. I will never say ‘retired’ because that’s such a finality that I don’t want to be part of my life. I’ll work until they throw me in a box.
—Mario Andretti
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¹ The Baptist College of Florida v. Church Mutual Ins. Co., No. 5:22-cv-00158 (N.D. Fla. Sept. 14, 2022).